SMUD heat pump rebates for Elk Grove & Sacramento homes
SMUD pays up to $3,000 toward a heat pump when you replace a gas furnace, and $1,000 when you upgrade an existing electric system. Here is what qualifies, what the installation has to include and how the rebate gets paid.
2026 rebates
SMUD heating and cooling rebates
SMUD raised its heat pump rebates in February 2026. As of October 2026, its heating and cooling rebate page lists:
- $3,000 for a variable-stage heat pump that replaces gas heating
- $2,000 for a two-stage heat pump (15.2 SEER2 minimum) that replaces gas heating
- $1,000 for a two- or variable-stage heat pump that replaces an existing electric system
- Up to $4,000 more in Go Electric rebates for a smart panel, subpanel or new circuit when you convert from gas
SMUD notes that rebates are subject to available funding, so amounts can change. Federal heat pump tax credits ended December 31, 2025.
Requirements
What the installation has to include
To qualify, SMUD requires:
- An active SMUD account on a home that is individually metered by SMUD
- City or county permits and a passed inspection
- Title 24 compliance through a HERS CF3R, or new ductwork insulated to at least R-8
- A Wi-Fi connected, 7-day programmable thermostat
- For ductless mini-splits, a system that serves the whole home
Package units, split systems and whole-home mini-splits are all eligible. We size every system with a load calculation so the equipment matches the house, not just the old unit.
How it works
How the rebate gets paid
SMUD rebates are submitted by a participating contractor in the SMUD Contractor Network. The contractor prepares the application for your signature, files it after the job passes inspection, and can take the rebate off your price up front and collect it from SMUD afterward.
When you call, ask how the rebate will be handled for your project. We will tell you which rebate tier your system falls into before you sign anything.
Is it worth it?
Heat pumps in the Elk Grove climate
Elk Grove and south Sacramento County winters are mild, with few nights below freezing, which is where heat pumps work best. A heat pump replaces both the furnace and the air conditioner, and SMUD estimates heat pumps save customers about $500 a year.
If your furnace or AC is near the end of its life, we will price a standard replacement and a heat pump side by side so you can compare after rebates. For the full comparison, read heat pump vs. gas furnace in the Sacramento Valley.
Services
Heating & cooling services
Questions
Common questions
Who qualifies for SMUD heat pump rebates?
SMUD residential customers with an active account in a home individually metered by SMUD. That includes most homes in Elk Grove, Galt, Rancho Cordova and Sacramento. Check that SMUD is listed on your electric bill.
Do I need a permit to get the rebate?
Yes. SMUD requires the installation to meet city or county permit and inspection requirements, plus Title 24 compliance.
Can I combine SMUD rebates with other incentives?
SMUD says its rebates can be combined with other incentives, but federal heat pump tax credits ended December 31, 2025, and SMUD reported in February 2026 that state incentive programs had run out of funding.
How much does SMUD pay for a heat pump?
As of October 2026: $3,000 for a variable-stage and $2,000 for a two-stage heat pump that replaces gas heating, $1,000 for an electric-to-electric upgrade, and up to $4,000 more for panel and circuit work when converting from gas.